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Google Apps discontinues basic package, asks new customers to pony up $50 per user for premium

Looking towards Mountain View to provide a suite of digital tools for your new business?  Make sure to pen per-user costs into your ledger — Google Apps isn't free anymore.

Engadget Sean Buckley

Context & Ripple Effects

Google Apps had been narrowing its free offering since its early limits on free Apps, then introduced monthly plans and charges for organizations with more than 10 users in 2011. Ending the basic package for new accounts turns that graduated restriction into an all-new-customer paid entry point.

The change concerns a business bundle that includes Gmail and Google Docs, making the price of collaboration software an explicit line item for startups and other prospective customers.

First-order effects

  • New Google Apps customers must budget for the $50-per-user premium package rather than begin on a free basic tier.
  • Google gains a paid acquisition path for every new business account, while existing free users are not identified here as being moved.

Second-order effects

  • Small businesses evaluating hosted email and document tools face a higher upfront adoption threshold, making Google’s premium bundle compete on its paid value rather than a free entry offer.
  • Google’s 2011 per-user plan for larger organizations becomes the clearer commercial model: seat counts directly determine the revenue attached to customer growth.

Third-order effects

  • If Google continues replacing free business entry tiers with paid seats, cloud productivity competition shifts toward recurring per-user pricing rather than free-service conversion.
  • The move points to business software vendors segmenting access by customer type and scale, with free plans serving a narrower role in acquiring organizational users.

The trend: Google Apps is part of a broader migration from free business-software tiers toward recurring per-seat subscriptions.